Our Calgary mortgage calculator will help you determine what your monthly mortgage payments could look like based on various factors, including your initial down payment, the length of your mortgage, and the interest rate for which you’re approved. This mortgage calculator for Calgary home loans can be used for first-time homebuyers or anyone looking to refinance their mortgage.
A mortgage payment calculator is a valuable tool for people who are currently renting, too, because it will help you calculate how much you’ll need to save up for a down payment in order to stop paying a landlord every month and start putting that money towards equity in your own home.
Buying a home is an incredibly rewarding experience and a big milestone in many people’s lives. For the vast majority of Albertans, their home will be the largest purchase they ever make, and finding the perfect mortgage will make a huge difference.
At K5 Mortgage, we’re dedicated to helping you make an informed decision by factoring in all of the necessary data, your wants and needs as a future homeowner, your monthly budget, and all of the other factors to ensure that you’re not only happy and satisfied with your new home but that you’re secure and stable in that home as well.
Terms You Should Know Before Buying a Home
Purchasing a home can be quite complicated, and finding the perfect mortgage loan even more so. In order to make the most of our mortgage payment calculator, you should be familiar with the following terms.
Down Payment
The down payment on the purchase of a home is a lump sum of cash that goes towards the cost of the property. There are pros and cons to having a larger or a smaller down payment.
A larger down payment means that you’ll ultimately be paying less in interest over the life of your mortgage. However, a smaller down payment helps to make homeownership more accessible to people with lower cash savings. For down payments under 20%, there is also a requirement to purchase default insurance, which adds an additional cost to take into consideration.
- For homes valued under $500,000, the minimum down payment amount is 5% of the property’s purchase price.
- For homes valued between $500,000 and $999,999, the minimum down payment is 5% for the first $500,000 and 10% for any amount over that, up to $999,999.
- For homes valued at $1,000,000 and above, the minimum down payment amount is 20% of the purchase price.
Saving for a down payment is an important first step towards homeownership. For example, in certain scenarios, for self-employed individuals with less-predictable incomes or people with less-than-stellar credit histories, a lender may require a higher down payment, or you may need to turn to alternative lending solutions.
Interest Rate
The interest rate in Canada will change as time goes by. It can increase or decrease depending on the movements of the overall economy and the Bank of Canada. You’ll have to choose between a variable interest rate mortgage or a fixed-rate mortgage.
Lower interest rates mean that a greater amount of each mortgage payment that you make will go towards the principle of the home, and that’s good, but it often means that the prices of homes will also increase as more people move to buy a home when rates are lower.
Due to this, trying to time things is usually not worthwhile since you don’t have any control over these fluctuations in the market. When you’re ready to buy a home, buy a home.
A fixed-rate mortgage will stay at the same rate throughout the term of your mortgage, and you’ll have to wait until the end of each term to renegotiate it.
There are advantages and disadvantages to either type of interest rate structure, and we can help you choose the one that best suits your lifestyle and your needs. A deeper dive into Calgary mortgage rates can also be helpful in your home search.
Amortization Period
This is the total length of time for the mortgage until it’s fully paid off and you own your home outright. The maximum length in Canada is 25-35 years, depending on certain circumstances. A longer amortization period means that you’ll end up paying more in interest, but you’ll have lower monthly payments.
Here are some more useful money management and mortgage tips to help you.
What Is a Mortgage Calculator, and Why Is It Useful?
A mortgage calculator for Calgary homes is a very useful tool that allows you to input various data points. It’s not the same as a mortgage application or a pre-application, and nothing is set in stone simply by using the calculator, but it gives you a good starting point to understand what types of costs you’ll be looking at.
These estimates are useful in helping you shop for your dream home because they give you insight into what you can expect to pay each month, based on the total value of your loan, the amount you put towards a down payment, the interest rate you receive, and the length of the mortgage.
Regardless of what you’re approved for, you’re responsible for your monthly payments at the end of the day, so you’ll want to do your due diligence to ensure you’re able to make your payments each month. There are some circumstances where you might want to consider smart loans, too.
Whether you’re paying weekly, bi-weekly, or monthly, this mortgage calculator will help you determine what your budget will need to be to afford your new home. It allows you to quickly compare the differences between various factors, for example, how much sooner you could pay off your mortgage if you had a larger down payment or how much you could lower your monthly bills by opting for a longer-term loan.
What Costs Does the Mortgage Calculator Not Factor In?
There are additional costs associated with purchasing a home beyond the mortgage and the initial down payment. These additional costs can typically add between 2-5% to the total cost you’ll be paying.
Make sure you keep some cash set aside for that, whether it means saving up a bit longer, opting for a slightly smaller home, going with a lower down payment, or choosing a longer amortization period.
Here’s a quick rundown of additional costs that you should anticipate.
- Moving Costs: This can range from costing a case of drinks and a few pizzas if you have some friends who can help or hundreds to thousands of dollars to hire a professional moving company.
- Adjustment Costs: This money goes to the previous homeowner to compensate them for any pre-payments they’ve made towards property taxes or utilities.
- Legal Fees: These are the fees associated with the necessary legal paperwork for purchasing a home.
- Title Insurance: This is insurance that protects you against losses relating to the title/ownership of the property.
- Mortgage Insurance: If your down payment is less than 20%, you’ll need mortgage insurance. We can help you determine what this will cost too.
- Home inspections: A home inspection can give you a small peace of mind knowing there aren’t any blatantly obvious issues or defects like massive structural damage. Still, unless the inspector is really getting into everything, it’s entirely possible to miss things. An inspection isn’t a guarantee that nothing will go wrong, and in some cases, you won’t have time to get an inspection, or the homeowners might not be on board if they have plenty of other offers piling up that aren’t contingent on an inspection.
- Property Survey: You may need a property survey, and if that’s the case, these can cost over a thousand dollars and, in some cases, a bit more than that. It’s not always necessary, sometimes the title insurance will suffice, or the previous owner may have a recent enough survey of the property.
Try Our Mortgage Calculator for Calgary Homes
If you have any questions about this home mortgage calculator, or if you’re ready to apply for a mortgage to purchase your new Calgary home, we’re looking forward to hearing from you. Reach out to us today, and we’ll answer any questions you have. We’ll guide you through the entire process of using a mortgage calculator, securing a loan, and finding somewhere to live so that you can start your new life, comfortable and securely, in the Calgary home of your dreams.